Whether male or female, folks in their 40s and 50s are likely well-established in their careers, with college bound children on the horizon, and maybe a vacation home in their sights. Retirement planning starts to take on some urgency during this period, and long-term goals should be revisited for relevancy.

Make sure your 40s and 50s are full of memories and milestones. To avoid a mid-life financial crisis, here are a few suggestions to help navigate financial waters during this period:

Protect Your Family: Look into short term and long term disability insurance, and check the status of your emergency fund. When you have others that depend on you, consider life insurance which can be an important addition to your financial plan. Certain types of life insurance also build cash value, which can help you grow funds that you can access throughout your life.

Prioritize Retirement Planning: Maximize your contributions to any workplace retirement plan or IRA. Take advantage of catch-up contributions when you can. Know the benefits of a Roth vs a regular retirement plan, and the circumstances under which it would benefit you most. For more information, read our past article about these differences here. Look into a cash balance plan if you are a small business owner. Also consider a health savings account if you have access to one, contributions grow triple tax free.

Build a Portfolio: If you haven’t already, it may be time to turn accrued cash sitting idle, or in a short term account tied to interest rates, into an investment account which would support the growth of long term goals and wealth accumulation. Did you know portfolios can be custom tailored for your needs? Talk to a TFG Financial Advisors professional about your options, asset allocation, diversification and risk tolerance.

Save for College and Higher Education: 529 Plans are the best vehicles for funding your children’s education, the earlier you start the better. A 529 plan can be set up for a beneficiary of any age and anyone can contribute to this account. Earnings grow tax free. When used for qualified education expenses, distributions are federally tax free. TFG Financial Advisors can easily help you set up a plan. More info here.

Consider Estate Planning: Now is an ideal time to figure out who you would like to name as your Power of Attorney and what kind of legacy you’d like to leave behind. Consider both current and projected needs for your family. Working up an estate plan will ensure that your wishes for your money and your health are carried out. Your loved ones will need to know where financial accounts are and how to access them if needed. It is important to your will and beneficiaries up to date, review annually. If you own a business, be sure there is a “buy/sell” agreement in place and create a business exit strategy to preserve the wealth within your business and transfer it to your family.

Longevity’s Unique Impact on Women: With longer lifespans comes the increased risk of widowhood, and possibilities of divorce, many women will find themselves navigating the financial complexities of aging alone, and with reduced income on which to draw. The seeds of financial independence need to be planted now to prevent outliving your nest egg in later years. Proactive financial planning for women has never been more important, here are a few suggestions for this stage of your life:

• Plan to Live to 100: To be sure your nest egg is adequate, work with an advisor to assess lifestyle needs through age 100, and be proactive. If you are still working, maximize contributions to retirement accounts, and ensure you have incorporated health care planning, medical spending, long term care and life insurance into your plan.
• Protect Your Future Income: Work with your TFG team to examine what sources of income you could tap for retirement. This could include your IRA, 401(k), investment accounts, annuities, the cash value of any life insurance policies or other assets that could produce income in retirement.
• Be Tax Efficient: A financial advisor can help you determine how to draw down from your assets in a tax-efficient way. They can look at your entire retirement portfolio and create a drawdown strategy that takes your goals, taxes and other retirement risks into account.

Reach Out to Us: A financial strategy demands ongoing care; it’s not a one-time arrangement. With the guidance of TFG Financial Advisors professional, you can continually adapt and refine your financial plan to accommodate shifting priorities and circumstances as you age, ensuring you remain on course to achieve your goals and financial security later on.